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Economic Bombshells | 2020's Top Five

Economically, 2020 has been a year of many ups and downs. Sadly, most of the major events were negative. Let's take a look at five of the most significant events of this year.

A Treacherous Outset

The year was off to a treacherous start with the UK's official resignation from the EU. The United Kingdom wasn't the largest member of the European Union, but it was a significant one. With the UK's departure, many financial institutions have plunged into uncertainty.

Many things were affected by the split, including tax levies and import costs. The UK and EU are still in talks to try and find neutral ground. Some of the critical questions that remain are who will be allowed to fish in the UK's waters and which institution will moderate any agreements made.

Brexit was only a foreshadowing of things to come. As much as we'd like to ignore the elephant in the room, it's had enormous economic significance.

The Covid-19 virus, first discovered in Wuhan, China, in December of 2019. It brought large swathes of the world to an economic standstill in 2020. Such has been its significance that the worldwide recession of 2020 is known as the, “Covid-19 recession.”

Due to the enforcement of social distancing, and the closing of borders, many countries have come to a tourism standstill. For countries like Bermuda and even South Africa, the hospitality industry's loss is significant.

Naturally, industries that can't work also can't pay employees. We've seen a sharp rise in unemployment figures in most countries and a lot of major civil unrest. 

However, a global recession is only one half the equation. The third major event is not a recession but a depression. Covid-19 is the catalyst that  has triggered both but has caused different ramifications for each.

Again, we return to the inability of working folks to work. We've seen a massive decrease in GDPs, and many countries will only keep plummeting.

Furthermore, countries that rely on food imports have plunged into chaos. Quarantines and temporary trade embargoes have caused an unsustainable situation.  Many struggling countries simply can't handle it.

We've seen one more major event emerge from this crisis. Worldwide, markets are struggling with an asset liquidity struggle. While commodities and other trade buffers stay relatively constant, there are few liquid assets in the market.

Many countries are stuck with their assets, mainly contained in fixed forms. It has led to a severe increase in national debts.

Furthermore, trading and FxForex trading has been negatively affected by the lack of liquid assets. Nevertheless, some traders continue to earn profits consistently.

Please, Pick Your Battles!!!

In light of the other events of 2020, the final bombshell is the most shocking of all. Amid economic downturn and struggling countries, we saw the US and EU embark on a full-fledged trade war. The two entities have been applying increased taxes to each other's imports.

We can only hope that, with all the knocks 2020 has taken, the economic events of 2021 will be far more beneficial to everyone.